Race for mayor in Shakopee will spotlight tax subsidies

  • Article by: DAVID PETERSON , Star Tribune
  • Updated: August 6, 2013 - 4:03 PM

A veteran council member’s challenge is expected to cover a lot of ground from Mayor Brad Tabke’s term in office.

When corporate executives came before the Shakopee City Council last week seeking a hefty subsidy in exchange for a move to town, Matt Lehman had a simple question.

“Has anyone seen a profit-and-loss statement to find out if they need this?”

Apparently not.

The Datacard Group is a privately held firm owned by a German family, said Jeff Smolinski, a senior vice president. Information can remain private. He did add, though:

“Could we fund this by ourselves? Absolutely. But do we spend all our money on a building, or do we reserve it for growth? The question is, is it more cost effective to stay in Minnetonka or come here?”

Not too long after that meeting, veteran Council Member Lehman filed to run for mayor. And while a series of tax concessions made to big firms in exchange for new jobs won’t be the only issue — not by a long shot — they will be a point of emphasis.

In an interview late last week, tax abatements were the second issue to arise, right after the mayor’s high-profile but quixotic quest for a Vikings stadium.

The election will give voters a chance to react to an exceptionally lively couple of years under the leadership of a youthful mayor whom Lehman calls “gung ho but inexperienced.”

On the other hand, Lehman has been turned away for mayor before, and he’s a lonely voice on the subsidy issue in Scott County right now.

On the Datacard issue, with its hundreds of potential jobs, even council members who’ve sided with Lehman on some issues seemed to be imploring company executives to come.

Council Member Steve Clay, assured the firm that their nightmare experience last week, taking hours to slog their way down to Shakopee during the partial shutdown of Hwy. 169, was just a temporary thing.

Colleague Pamela Schurman reminded the firm that “your associates would enjoy a reverse commute” — they wouldn’t be fighting the normal congestion heading out of Scott County toward the north.

Tabke himself is immensely proud of the parade of new employers in town, speaking of a city that’s developing “incredible momentum” in a countywide quest to nail down its future prosperity by having half of Scott’s workers holding jobs within the county borders within the next 15 to 20 years.

When it came to Datacard itself, city and council officials stressed that precise numbers for the cost of tax abatements have been in flux and depend on factors yet to be decided.

Nor has every detail been pinned down yet on the question of salary levels for jobs, said Shakopee city administrator Mark McNeill.

“They will bring 680 jobs at a handsome average salary,” he said, “but about 20 employees are under [the required pay threshold if a company is to get assistance], and that will be negotiated.”

A statement from the city afterward placed the value of the city’s property tax abatement at Valley Green Industrial Park at $334,869 over 11 years. It added that the firm “has not made a final decision on whether it plans to relocate to Shakopee.”

Datacard’s Smolinski cautioned that the move to Shakopee isn’t necessarily causing lots of high fives among the existing Minnetonka workforce.

“Based on tonight,” he said, “I left around 5 p.m. and [a compatriot] 10 minutes before that, and we just arrived here. I understand that’s a short-term problem, but that is a big concern to our employees.”

On the other hand, that cringe factor could end up being to the benefit of local workers. If there’s attrition due to the move, he said, “Those jobs we hope will be filled by folks who’d love to work in Shakopee rather than fight traffic on 169 to get to a job in the cities.”

The subsidies passed overwhelmingly in a joint session with the Scott County Board, with County Commissioner Joe Wagner noting that even if most of the jobs don’t go to local people, the workers still will eat lunch at local restaurants during the workday.

“I always figure that when people are getting that kind of money, they are able to go to lunch and spend money in the community, even if they live in Edina,” he said. “They still are here eight or nine hours.”

 

David Peterson • 952-746-3285

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